Jobs boost for manufacturing sector

This Is Lancashire: New figures provide encouragement for the manufacturing sector. New figures provide encouragement for the manufacturing sector.

Manufacturers are creating new jobs at the fastest pace since May 2011 after figures today showed the sector maintained its improvement last month.

February's reading of 56.9 for the closely watched CIPS/Markit purchasing managers' index (PMI) survey - where the 50 mark separates growth from contraction - was better than the 56.6 seen a month earlier.

Levels of production and new business rose at an above-trend rate, which filtered through to the labour market, with jobs creation at a 33-month record.

The better-than-expected result marks a return to form for the sector after a slight dip in the reading for January.

Maintaining the performance will be a key factor in rebalancing UK growth away from the consumer and financial sector towards investment and exports.

Despite the impact of flooding on large parts of the UK, the strengthening domestic market was the primary driver of the manufacturing recovery, with an 11th successive monthly rise in production volumes.

New export business also posted a solid gain in February, although the rate of increase eased from January's near three-year record. Manufacturers reported improved inflows of new work from clients worldwide, including Europe and China.

Underpinning the rise in employment were signs of strain on the capacity of some firms, reflecting a slight gain in backlogs of work during the month.

Markit senior economist Rob Dobson said the survey pointed to another quarter of robust economic growth in the first quarter of the year.

He added: "The manufacturing PMI ticked higher in February to provide welcome reassurance that the sector has weathered the storms and flooding in parts of the country during the month. Growth of production and new orders lost only a little momentum and are still rising at above trend rates."

Input prices showed no change, giving factories some breathing space to increase their selling prices and allowing them to catch up on profitability, today's report added.

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